Until a few years ago, millennials were not inclined to buy homes. Why? Because they fashioned a lifestyle that left them mobile, they had a lot of college loan debt, and they have not embraced the traditional values of older generations – settling down in one place, building equity, and staying with one employer for a career duration.
That has changed somewhat for several reasons. One, they are starting families; two, they are looking at gentrified neighborhoods and finding them attractive; and three, many are finding entrepreneurship and remote working environments are allowing them to “settle” and still remain flexible in their careers. In fact, recent stats show that 36% of home sales are now made to this generation.
What about smart homes?
One thing we also know about millennials is that they are very mindful of environmental sustainability. They tend to do business with companies that are also mindful of the environment. So, it seems logical that they would look for homes that are – or at least re-configure homes they buy to be – “smart,” with the internet of things (IoT) devices that allow them to save energy and provide more convenience. Smart homes allow them to control heating and cooling, lights, and a myriad of small home appliances remotely.
The older segment of this generation (aged 27-36) seems “sold” on smart home concepts. In fact, 38% of them already have purchased homes that are “smart” or have installed the technology. And of those remaining, 58% are interested in doing this.
The younger contingent does not seem as interested in doing so. There may be several reasons for this. One, this younger segment appears to be very security conscious and is concerned about the risks involved in IoT devices in their homes. They worry about privacy.
There is also the cost factor – configuring a smart home can be pricey.
The other key factor in home buying for the younger segment of this generation is mortgage cost and payments. These young people are closer to the college loan payment issue than their older cohorts. They are not looking for smart homes as much as they are looking for the most favorable lending environments.
Another reason seems to be that they are far more interested in creating a healthy home environment than a “smart” one. They want sustainable and all natural furnishings; they want construction materials without chemicals; they want LED lighting technology; they want energy-efficient windows. They don’t seem to want to be “cool” and “trendy” as the older segment does.
Where does this leave the future of smart homes?
Smart homes are not going away. And as the technology improves, along with security innovations to provide greater security and privacy, they will prove to be a valuable resource for all consumers who are looking to be environmentally conscious and to lower the costs of their utility bills. In fact, a recent survey indicated that 72% of millennials would be willing to pay $1,500 more for a home that was “smart,” and 42% of those would be willing to pay as much as $3,000 more.
Smart home technology is only improving, and there certainly are exciting innovations and challenges for the future. These will attract more and more millennials who thus far have not invested in smart home technology.
Addressing security and privacy
Manufacturers of smart devices are focusing on these issues now, and the second half of 2018 will see new innovations in this arena. As security improves, younger millennials will get on board.
Integration of devices
One of the inconveniences with expanding smart home technology is that homeowners are accessing different platforms for each connected device. Integrating these into fewer and more standardized access points will make adding IoT devices much more popular and convenient. Manufacturers will work on integrating all of their appliances into one platform. And just like USB cords, different manufacturers will come to accept common standards.
Artificial intelligence (AI) will play a role
What if AI could learn human patterns of movement to and from and around the house. It could then alert homeowners when something does not “fit” that pattern, certainly improving home security. AI could also take over video monitoring so that it need not be done remotely by the homeowner.
More voice control
This may be integrated with personal assistants like Alexa and Siri. We now give them voice commands, but if they are integrated with smart devices, consumers could simply tell them what time to turn the thermostat up or down, when to kick in the security system, etc.
Whether younger millennials are wholly captured by smart home technology remains to be seen. Certainly, some of them will. But in a few years, generation Z will come along, and by that time the technology will be too attractive to turn away.